Capella drops Ark. hospital deal amid questions from Vatican, feds

Franklin-based Capella Healthcare has dropped its bid to purchase a Hot Springs, Ark. hospital, amid questions by federal regulators and the Vatican.

The company had announced plans to purchase Mercy Hot Springs more than a year ago, but there were concerns because Capella already owns another hospital in Hot Springs - the National Park Medical Center.

The proposed deal drew scrutiny - including subpoenas - from the Federal Trade Commission, and plenty of questions from the Catholic Church. Mercy Hot Springs is owned by Mercy Health, the sixth largest Catholic healthcare system in the country with 32 hospitals nationwide.

Some in the local community - including a prominent Catholic leader, for instance - had expressed concerns about a faith-based nonprofit selling to a for-profit hospital company.

"Because we anticipate continued challenges - over an indefinite timeline - in obtaining the needed approvals, Capella and Mercy have mutually agreed to not renew our asset purchase agreement and will end our discussions at this time," said Lynn Britton, President and CEO of Mercy. "We believe prolonging this uncertain and complicated path is not in the best interest of our local caregivers and the community."

Capella, which operates 14 hospitals in six states, said the decision was difficult, especially given the time invested in due diligence and other research.

"This has been a complex process - particularly challenging for employees, physicians and volunteers at the local hospitals," said Dan Slipkovich, CEO of Capella. "We sincerely thank them for their patience and continued unwavering commitment to providing excellent care and service throughout this process."

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Capella drops Ark. hospital deal amid questions from Vatican, feds

Franklin-based Capella Healthcare has dropped its bid to purchase a Hot Springs, Ark. hospital, amid questions by federal regulators and the Vatican.